Birmingham Mid-Year Report: Metro area home sales up 17% during 2nd Quarter

View full sizeBirmingham home sales in June were up 13% compared to last year. Infograph courtesy of ACRE. All rights reserved.

June residential sales totaling 1,117 units in the Birmingham metro area represent a 13.2 percent improvement from June 2011. June represents the twelfth consecutive month that Birmingham area home sales have improved when compared to the same period from the prior year.

As a result of last year's April 27th disaster, a degree of statistical distortion was anticipated during the second quarter. Comparing current statistics to multi-year averages is another method to gauge current market progress during this period of comparative statistical volatility. Sales were 3.7 percent higher than June's three-year ('08-'11) sales average.

ACRE also recommended that due to the market disruption on April 27th, reviewing the housing statistics by the quarter (2nd) would be an appropriate lens under the circumstances (volatility of April, May, June 2011 statistics). Sales during the 2nd quarter of 2012 grew 16.75 percent from the same period in 2011. Year-to-date (YTD) sales through June are up 16.7% from 2011.

Supply: Birmingham area housing inventory totaled 8,361 units, a decrease of 16.3 percent from June 2011 and a 37.1 percent decline from the peak hit in June 2007. The inventory-to-sales ratio in June stood at 7.5 months of housing supply, a 26.0% decline and improvement from 10.1 months in June 2011. Restated, at June's sales pace, it would take 7.5 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand) is considered to be approximately 6 months. This translates into continued pressure on pricing.

Birmingham housing inventory experienced a 2.1 percent increase from the prior month. This movement is consistent with historical data indicating that June inventory on average (’07-’11) increases from the month of May by .4 percent as homeowners in greater numbers elect to list their home during the spring buying season in anticipation of greater demand.

Demand: In June, existing single family home sales accounted for 83 percent (down from 88% in June'11) of total sales while 13 percent were new home sales (up from 10% as June'11) and 4 percent (up from 2% in June'11) were condo buyers.

Residential sales are seasonal, typically peaking during the late spring/early summer. Birmingham residential sales were 7.2 percent up from the prior month. This movement is consistent with historical data indicating that Birmingham area sales, on average (’07-’11), increase from the month of May by 7.1 percent.

Pricing: The Birmingham metro area median selling price in Mayl was $165,300, an increase of 7.2 percent from last June. This figure also represents an increase of 6.0 percent when compared to the prior month. Historical data ('07-'11) indicates that the May median selling price increase from the month of May by 2.9 percent. To be clear, the market is still price-sensitive and houses that are selling are those that are accurately priced reflecting current market conditions down to the subdivision. Pricing guidance is critical in this market and ACRE suggest seeking professional consultation. See related article on Birmingham's housing affordability indexhere.

As the market transitions into the third quarter of 2012, statistical volatility is anticipated and total sales volume will likely begin to slow due to seasonal buying patterns and the fact the economic growth has slowed. With that said, most of the local & statewide housing statistics reflect a real estate market that is gradually improving and that is good news for Alabama consumers as well our state's real estate community. Recent relief at the gas pump is also welcome news but continued anemic US job creation/economic growth, stricter underwriting standards, and financial instability overseas in Europe top the list of concerns that market watchers cite as elements that could possibly impact the fragile housing recovery.

View the current monthly Birmingham Metro Residential Reporthere. This monthly report is provided compliments of ServisFirst Bank. Compare Birmingham to HuntsvilleandMontgomery, peer markets within the State.

The Birmingham Residential Monthly Report is work product developed in conjunction with the Birmingham Association of REALTORS to better serve Birmingham metro area consumers. The ACRE monthly report is provided to illustrate the "general" market direction & trends when comparing prior periods with the most current residential data available. Real estate is local and statistics will fluctate between areas within a city including subdivisions, and ACRE recommends that you consult a local real estate professional for "specific" advice associated with your market.